Musings on World events from the perspective of a Social and an Economic Liberal.

Thursday, April 13, 2006

European Decadence

Hilmar Kopper, the President of Deutsche Bank has shrewdly identified a key problem with Europe as follows: "To agree on keeping a status quo that can't be kept has nothing to do with consensus. It's decadence".

The scale of our problems in Europe is now enormous. Demographically, Europeans are not even replacing themselves. The steady decline in the economic significance of Europe is becoming a collapse, as India and China emerge as modern economies. As economic power flows elsewhere, the political and cultural influence of Europe ebbs too. Still the leaders of Europe do not admit, even to themselves, that the point of crisis is now upon us. Listless and nervous, the voters do not know where to turn. A succession of elections in Portugal, Germany, Italy, and Poland have demonstrated confusion as to how to face up to the scale of the problems. The institutions that have guided Europe through the years of recovery after the two world wars are now seen a shaky and no longer reliable. NATO, once so critical for European security, seems now only a mechanism to retain American engagement in Europe, when the US would rather look elsewhere. The European Union seems to have become a bloated failure, bogged down in over regulation and elitist projects that do not connect with the general population.

European weakness has become European decadence because of a failure of leadership. In country after country there has been a failure to tell the truth about the crises that we face. It is the dishonesty of the French elite that has brought the populace onto the streets in support of a system that can no longer be sustained. A "Liberal" of what ever kind, especially the reviled "Neo-Liberal" is a hate figure in a country that urgently needs liberal reform if it is to escape economic trap that fifth Republic social policy has created. In France, as in Germany, the crisis is not a distant prospect, but a wave crashing ashore. Though more distant, the crest of the wave is now clearly seen in Britain too- and leadership is similarly lacking.

Perhaps the problem is that most of the possible solutions to European problems are counter intuitive: fixing unemployment by making it easier to hire and fire, and easing immigration controls. Creating a more secure society by abolishing state controls on the economy. These are both hard for voters to understand and unttractive for political leaders since they reduce their power. Yet leaders of vision must understand that the stakes are high. Attempting to cling on to the status quo will fail. Leadership is required: difficult decisions must be made now. Without leadership, the decisions will be made anyway- but not in Europe, and not to European advantage.